Raw sugar output in Philippines seen dropping to 25-year low

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The country's raw sugar production could fall below 1.8 million metric tons (MT) in the new crop year, the lowest level in 25 years, after farms reeled from the effects of El Niño, resulting in stunted growth of sugarcanes.

The Sugar Regulatory Administration (SRA) estimates that raw sugar output in the current crop year 2024-2025 could decline by at least seven percent to 1.782 million MT from the previous crop year's 1.922 million MT.

The projected raw sugar production in the current crop year, which began last Sept. 1, could be the lowest output level in more than two decades or since the 1.619 million MT recorded in crop year 1999-2000.

SRA administrator and CEO Pablo Luis Azcona confirmed the latest crop output estimates to The STAR yesterday, noting that the sole reason behind the foreseen production is the dryer and hotter weather conditions brought about by the El Niño phenomenon.

The extreme weather condition forced sugarcane planters to cut their crops and replant to have better sugar yield.

At present, some standing sugarcanes are still immature, forcing various quarters in the industry to seek another two-week delay in the opening of the milling season to give the plants more time to grow and have more sugar content.

Sugar milling season was set to start on Sept. 15, but industry stakeholders, including big sugar millers, are open to deferring it toward the end of the month.

With the projected lackluster output, the SRA board is anticipated to approve an all-'B' allocation, which would mean all raw sugar produced until Aug. 31 next year shall be sold solely for domestic consumption.

The SRA board is expected to approve and issue Sugar Order 1 today, which outlines the sugar policy at the start of a new crop year. The SRA board classifies sugar into four categories: A for export to the US market, B for local market, C for reserved and D for export to the world market.

Azcona earlier hinted that the raw sugar allocation for crop year 2024-2025 would be all B to ensure that the country has sufficient stocks, since projected output remains lower than estimated overall domestic demand.

Industry sources said retail sugar prices shall remain stable as carry-over stocks coupled with forthcoming arrival of imported refined sugar would uplift domestic supplies, negating the foreseen drop in domestic output.

The SRA board earlier greenlit the importation of 240,000 MT of refined sugar to cover the gap in domestic supply before the start of the refining season.

The retail price of raw sugar in Metro Manila wet markets averaged P76.15 per kilogram while refined sugar cost P84 per kilogram, based on latest available SRA data. The prices have been at least 10 percent lower than their average quotations last year, equivalent to a reduction between P8.7 and P10 per kilogram, SRA data showed.